Currencies: Relief for frankowiczów small. Big fuss about nothing – Virtual Poland

Currencies: Relief for frankowiczów small. Big fuss about nothing – Virtual Poland

Banks quickly agreed to the proposal of the Polish Bank Association alleviate frankowiczom. Suspiciously quickly. Recommendation of the PBA can deplete their profits, but only slightly.
 
 

The very next day after the conference, Deputy Prime Minister Piechociński loud, banks have expressed their unanimous consent to the proposed solution there. When a closer look at the list, it is not surprising, however, quick response. In the current situation, because it is a minimum of decency.

let’s look at the proposals:
 - Negative rate of LIBOR – the banks have to accept that the interest rate can be negative,
 - 6 months spread lower rate,
 - Credit holidays – extending the repayment period at the request of the borrower,
 - The abandonment of additional security for regular repaying a loan,
 - No download fees for currency conversion for a buck. Conversion would be carried out ac cording to the average NBP
 - The use of flexible rules for restructuring loans.
 

Whatever is the latter, in the case of the first five postulates can really speak, not of the relief frankowcom, but about improving the image of banks.
 

When it comes to negative interest rates , you need to be aware that the interest rate can not be zero, because the law prevents a loan without interest, let alone the extra bank. In other words, LIBOR plus a margin must be positive. Assuming that the average interest margin frankowych loans was at 1.5 per cent., Even at current rates of negative CHF 3M LIBOR – 0.74 per cent., bank credit continues to receive a salary, except that of the 0.7 percentage point lower .
 

As for the spread rate – do not forget that banks implemented so far very high spreads sześcioprocentowe . When you see the possibility of repayment of loan installments in francs, not in US dollars, without having to buy the currency at a bank, where you want the credit, immediately appeared on the market Internet exchange services, enabling the purchase of currency and repayments by its means . They apply it spreads only about 0.6 percent . It took only a little bit of effort borrower to skip the bank spread. The current great demands for cuts in this area so quite funny sounds when the client can skip them already.
 

In the last week of PKO BP and BZ WBK announced that temporarily reduce spreads to 1 percent. Heroic movement approached banks so just to competition that and this is still the better. So we can say that the banks use the confusion to recover some lost market share to websites at the same time, getting a good ad as bend over misfortune frankowiczów .
 

Credit holidays – is the solution used in many types of loans. Nothing new. Banks offer is now universally mortgages, allowing the suspension of payments of principal and interest installments repaying themselves.
 

Giving up additional collateral for the loan repaying regularly – you have to know that loans are banks francs very well, “repayable” loans. Only a small percentage of the bank is part of themselves as non-performing loans. At the risk of loans you have to create a reserve on paper profits reduced. If the bank is aware that clients will still be well pay , why risk a war that could lead to the need to take over the property, worth less than the amount of the loan? Then another auction costs, hiring brokers in the sale of apartments …

For the sake of peace, a highly probable hope that loans will continue to pay, so the banks could adopt this proposal without batting an eye. They now have an additional washer formal – “everything by recommendation, we do not do anything illegal, giving relief to a select group of borrowers.”
 

Finally, the case is not a commission, if the borrower wants to przewalutować commitment and counting of the operation according to the average NBP. The loss for the banks would be large (loss spread movements), had many customers took advantage of the opportunities and said they will buck even though losses on current high rate of the franc. Frank is now very high, so it is not difficult to guess that scale conversion to a penny on such a high exchange rate will be minimal .
 

In addition, banks lend in local currency, after all, and US dollars will receive credit. Even with the resignation of its spread, banks, after part of this spread has won the award of credit , because the loan was granted at the selling rate franc, and the average rate on repayment is simply the only version of the lower half of the spread!
 

In summary – the proposals adopted by banks is more a marketing campaign, indicating that banks also do something to remedy the crisis than the actual changes that could cost the banks any specific money.
 

Jacek Frączyk,
 
 Editor-in-Analyst